Alex Gates knows the Omaha Public Schools have a pension problem.
The father of three children attending school in OPS told the school board on Wednesday night that he knows finding ways to correct the situation is difficult. But Gates asked the board to consider the impact on teachers when looking at budget cuts as a way of dealing with the pension shortfall. He urged them to find ways to keep veteran teachers.
The district cut its budget $19 million — about 3 percent — this school year to make a required catch-up payment needed to restore the fund. Those payments are expected to escalate each year for the foreseeable future.
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“There’s no question that we’ll be feeling the effects of the pension shortfall for many years to come,” Gates said. “But don’t disregard the effects of undervaluing our teachers and building leaders.
“We can’t afford to lose our best to neighboring districts,” he said.
Gates sat with dozens of teachers from the Omaha Education Association at the board meeting. OEA, the union representing OPS teachers, is in the midst of negotiating a new contract with the district.
Wednesday’s meeting was the board’s first since The World-Herald started publishing a series looking at the roots of the $771 million shortfall in the OPS pension fund. A massive liability, the shortfall is forcing the district to slash its budget to meet mandated obligations to its retirees.
The series, which is ongoing, has revealed that bad decisions by the fund’s trustees have cost hundreds of millions of dollars. Those decisions included selling off stocks during the 2007 economic downturn, large investments in risky non-stock alternative investments, and a cozy relationship with a firm that both advised the trustees and sold them many poor-performing investments. In 2016, the state took over investment authority from the trustees and district.
Most of the mistakes that have cost the fund were made before current OPS school board members were elected.
Ben Perlman, who was elected to the board in 2016, said that despite the two World-Herald articles, there still hasn’t been an apology or semblance of taking responsibility by the people who made the decisions about the pension fund.
“From everything that I’ve read and everything I know, these decisions weren’t just bad decisions, they were inexcusable decisions,” Perlman said.
The pension board of trustees was made up of a former superintendent, several former board members and other district personnel. Additionally, the full school board was legally obligated to sign off on all investments approved by the trustees. Past school board members have said they deferred to the decisions of trustees, who were the ones who sat through hours-long meetings getting briefed on markets and investments.
World-Herald staff writer Henry Cordes contributed to this report.
Meet the 2009 OPS trustees
These 10 members served as trustees for the Omaha School Employees' Retirement System during key years when investments were shifted from the stock market to so-called alternative investments. The decisions meant the system largely missed the stock market rebound and got lower returns or losses from the alternatives, creating the shortfall Omaha Public Schools is trying to manage.